Set Default Regional Edition

Note: When you select a default region you will be directed to the MiningWeekly.com home page of your choice whenever you visit miningweekly.com. This setting is controlled by cookies and should your cookies be re-set you will then be directed to the regional edition associated with the geographic location of our IP address. Should your cookies be reset then you may again use the drop-down menu to select a default region.

Note: Search is limited to the most recent 250 articles. To access earlier articles, click Advanced Search and set an earlier date range.To search for a term containing the '&' symbol, click Advanced Search and use the 'search headings' and/or 'in first paragraph' options.

Addressing media at a briefing in Centurion, on Wednesday, Agri SA president Johannes Möller said there were still uncertainties with respect to water supply and contamination issues associated with shale gas development, as well as infrastructure and landscape concerns.

Advertisement

“Agri SA remains committed to assisting government in ensuring the economic development of South Africa; however, given South Africa’s precarious water position and the threat to food security, Agri SA maintains that this endeavour in South Africa must be approached with the utmost caution,” he said.

Exploration for shale gas in the Karoo has raised concerns among many industry bodies and nongovernmental organisations regarding environmental damage weighed against the potential economic benefits.

Advertisement

The South African Oil and Gas Alliance, which represents the oil and gas industry, told Parliament last month that the 20% State-carried interest proposed in the Mineral and Petroleum Resources Development Amendment Act (MPRDA) needed to be halved to make the industry commercially viable.

Government, has, meanwhile hailed shale gas as a potential "game-changer" for South Africa, but industry says policy uncertainty is likely to deter global players that are critical to shale gas development from investing in South Africa.

Agri SA’s provincial affiliate in KwaZulu-Natal recently obtained interdicts in the Pretoria High Court preventing the Petroleum Association of South Africa from granting respective applications for an exploration right and a technical cooperation permit, together covering more than 1.6-million hectares and 15 000 farms in that province, to Rhino Oil and Gas Exploration South Africa.

“The issue with the granting of technical cooperation permits and exploration rights for shale gas in terms of the MPRDA is that they give the holders of such rights the exclusive right to apply for, and be granted, production rights,” Möller said.

Should the current applications for shale gas in the Karoo and the KwaZulu-Natal Midlands be granted, he said, the holders of those rights would automatically be entitled to be granted production rights, which would allow for full-scale shale gas production activities.

He noted that it would be unwise not to take a position on this issue right from the outset, knowing that rights obtained today may already entitle the holders of such rights to continue with full-scale production in the future.

During his budget speech last month, Mineral Resources Minister Mosebenzi Zwane said shale gas development was estimated to start in 10 to 15 years’ time.

“The position by government therefore appears to regard the development of a shale gas industry in South Africa as definite,” Möller stated.

He added that, should shale gas development in South Africa proceed, the potential for competing land uses that are incompatible with agriculture is a very real threat.

Möller pointed out that mining activities and other developmental pressures were increasingly taking away or sterilising land that was being used for agricultural purposes.

“Where stocking rates are low and the capital required to be invested in land is high, the threat of competing land interests is a significant concern,” he said.

Möller added that shale gas exploration and production was anticipated to radically transform the existing landscape and that the construction of well-pads and the visual disturbance it would create were also of concern.